"The lawsuit claims Meta may have made as much as $7 billion per year from "high-risk" ads that showed signs of being fraudulent. The case was filed on behalf of California residents and accuses Meta of breaking the state's false advertising and unfair business practices laws. Santa Clara County is asking for restitution, civil penalties, and an order stopping Meta from continuing the alleged behavior."
"According to the county, Meta did not do enough to remove scam ads and instead created internal limits on anti-scam efforts if those efforts would cost the company too much money. The complaint also claims that Meta made the problem worse by allowing middlemen to sell ad accounts that were protected from enforcement."
"In addition, it alleges that Meta targeted scam ads at users who had already clicked on similar suspicious ads before and that Meta's generative AI tools sometimes helped marketers create scam ads. Meta has previously denied that it knowingly allows scam ads to run in order to protect revenue. The company has said that it fights fraud because users, real advertisers, and Meta itself do not want scam content on its platforms."
"However, Santa Clara County argues that Meta misled the public by saying anti-scam efforts were a top priority while allegedly benefiting from fraudulent ads. The filing even claims that Meta may be able to adjust how many scam ads appear on its platforms to smooth earnings or hit revenue targets. County Counsel Tony LoPresti said that Silicon Valley prosecutors have a duty to hold tech companies accountable, and that the county is working with outside law firms that will be paid only if the case succeeds."
Santa Clara County filed a lawsuit against Meta Platforms over scam ads appearing on Facebook and Instagram. The county alleges Meta earned up to $7 billion per year from high-risk ads that showed signs of fraud. The complaint claims Meta violated California false advertising and unfair business practices laws and seeks restitution, civil penalties, and an order preventing continued conduct. The allegations cite leaked internal documents and assert Meta limited anti-scam efforts when costs were high, allowed middlemen to sell protected ad accounts, and targeted scam ads to users who had previously clicked similar suspicious ads. The complaint also alleges generative AI tools sometimes helped create scam ads. Meta denies knowingly allowing scam ads and says it fights fraud to protect users, advertisers, and the company.
Read at TipRanks Financial
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